Workers at Ford Agree to a Four-Year Contract

Source: Bloomberg News

By Bill Koenig

Ford workers overwhelmingly approved a new contract , allowing a third U.S. automaker to reduce pay for new hires and shift retiree health-care obligations to union-run funds.

Seventy-nine percent of Ford employees who cast ballots voted for the four-year accord, the United Auto Workers said yesterday. Ford, the only automaker to avoid a strike during almost four months of talks, won wider approval than General Motors and Chrysler.

The U.S. automakers, which lost more than $15 billion last year, sought the changes to help close a labor cost gap with Toyota and other foreign rivals. They now must use the savings to make their products more attractive to American consumers, who are buying Japanese vehicles in record numbers.

"The health-care portion of these contracts has a potential to save large sums, but the savings don't begin to accrue until 2010," said Gregg Lemos Stein, an automotive credit analyst with Standard and Poor's in New York. "Ford and the other Michigan-based automakers face an array of challenges before they are able to get the bulk of the benefits from these contracts."

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2007/11/14/AR2007111402309.html